Not the Best of Times for Gov. Tom Corbett: State Roundup

By PA Independent

HARRISBURG — It was not a great week for Gov. Tom Corbett.

The state’s unemployment rate is stubbornly high (and Corbett did a poor job explaining why on a radio program), while tax revenue is well below where Corbett needs it to be to make his budget proposal balance.  One of Corbett’s top priorities for the spring — the privatization of the state liquor stores — took several hits this week.  And to top it all off, a new poll confirmed previous ones showing the governor falling behind several potential Democratic nominees in 2014.

Liquor privatization gets slowed, questioned and attacked

The state House passed a liquor privatization bill during the final week of March, but it will be at least mid-June before the state Senate considers doing the same, according to state Sen. Charles McIllhinney, R-Bucks, who largely controls the future of the liquor bill from his post as chairman of the Senate Law and Justice Committee.

“If I feel I need more time, I’ll take more time,” McIllhinney said, following a hearing on Tuesday stocked with opponents of privatization.

The senator said two more scheduled hearings would have a more balanced list of testifiers.

Senate President Joseph Scarnati, R-Jefferson, meanwhile, seemed only lukewarm on the idea of liquor privatization during an appearance at the Pennsylvania Press Club on Monday. Instead of an intense focus on privatization, the budget should be getting more attention, he said.

Corbett said he wants to have a liquor bill on his desk before June 30, which also happens to be the deadline for completing the budget.

Finally, the union representing 3,000 or so of the state employees in the liquor stores announced Thursday they would begin running statewide radio and TV ads to attack the privatization plan.

Corbett got fancy pen, robe, and more during 2012 travels

Back in March 2012 when Corbett traveled Europe on a trade mission, he received a suave souvenir – a $275 fountain pen gifted by a public official at an event in Oyonnax, France.

That was while Corbett was touting Pennsylvania as part of trade mission paid for by the Team Pennsylvania Foundation, a trip that cost nearly $11,000.

Pennsylvania lawmakers, Corbett included, reported the extent of gifts and travels as part of financial disclosure forms due this week with the State Ethics Commission. According to state law, public officials must disclose gifts valued at $250 or higher, unless given by family or friends.  They also must report any transportation, lodging and hospitality paid for worth at least $650.

The reports give a glimpse into what public officials receive from special interests in their district, across the state or even internationally. But some government watchdogs say gifts for lawmakers should be banned altogether to erase any shadow of buying-off a public official.

In addition to the fountain pen, Corbett also reported receiving two Turkish robes and towels, along with a vase and plate, valued at $275. The gifts were presented during an appearance with the Turkish Cultural Center Pennsylvania.

Top legislative leaders on both sides of the aisle disclosed no gifts.

Unemployment rate drops, but concerns rise

Pennsylvania’s unemployment rate fell to 7.9 percent in March from 8.1 percent in February, but economic analysts said there were worrying signs beneath that optimistic top line.

According to the federal Bureau of Labor Statistics, the number of people working in Pennsylvania tumbled by about 14,000 in March, following a drop of 6,000 in February. Those reductions in employment were accompanied by a 33,000 reduction in the state’s labor force — the measure of people working or actively seeking work — during March.

The decline in the labor force effectively disguised the drop in employment and gave Pennsylvania a two-notch reduction in the unemployment rate.

“If you look at it right now, there doesn’t appear to be a whole lot of strength in any sector,” said Jake Haulk, a former economist with the Federal Reserve who now serves as president of the Allegheny Institute, a free market think tank in Pittsburgh. “The negative incentives out there are just overwhelming.”

In a graceless moment, Corbett this week suggested that unemployment in the state was so high because employers were having a hard time finding potential employees who could pass a drug test. Democrats had a field day.

Even at 7.9 percent, the state’s rate remains three ticks above the national average of 7.6 percent.

When government gets hacked, now they’ll have to tell you

The state Senate passed a bill this week requiring state agencies to give swift notice to residents when a data breach occurs, potentially allowing hackers to access sensitive personal information from governmental computers.

The legislation, sponsored by Senate Majority Leader Dominic Pileggi, R-Delaware, comes after several data breaches at state agencies jeopardized the information of thousands of residents. In those cases, thefts of state-owned computers exposed the personal information of as many as 400,000 people, including 17,800 Social Security numbers.

Affected residents were not told about the problems for several weeks.

“There’s no good reason to delay public notification after a data breach,” Pileggi said. “Potentially affected residents should know what happened as soon as possible when personal information is stolen so they can take steps to protect themselves from identity theft.”

House leadership expressed an interest in the bill.

Budget gap could mean more fiscal belt-tightening

With two months left in the fiscal year, Pennsylvania seems unlikely to collect enough revenue to meet the Corbett administration’s expectations.

In February, the governor’s budget office raised their revenue projection for the year by $232 million, but after the April revenue report was released this week, the administration backed off those higher figures.  For now, Pennsylvania is about $60 million above the original baseline for the year, leaving a $160 million gap in next year’s spending plan.

“It’s pretty clear that we won’t end the fiscal year with that extra $232 million,” said Elizabeth Brassell, spokeswoman for the Department of Revenue. “It’s unlikely that we will experience any significant gains in the next two months.”

The budget office said the result would probably mean more “fiscal discipline” in the coming budget.

The state also is contending with about $700 million in mandatory cost increases, mostly the result of higher pension payments coming due and debt service.

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